Hi RPress2022,

I'm happy to share how you can record the second payment so it will show up in the bank register. We won't use a credit memo here.

The first payment can be recorded like a normal Receive payment transaction. Then, deposit it into the bank register.

The second payment can be recorded as a deposit in the bank register. Just use the Accounts Receivable account to turn it into customer credits.

If you need to return the funds, just follow the set of steps below.

Step 1: Record the refund for your customer

1. Select + New.
2. Select Expense or Check.
3. Select the customer you want to refund from the Payee ▼ dropdown.
4. From the Payment account ▼ dropdown, select the bank account where you deposited the overpayment to.
5. On the first line of the Category column, select Accounts Receivable.
6. Enter how much you want to refund in the Amount field.
7. Fill out the other fields as you see fit, then select Save and close.

Step 2: Link the refund to the customer's credit or overpayment. The purpose of this transaction is to close the status of the credits and the check transaction.

1. Select + New.
2. Select Receive payment.
3. Select the same customer you used for the check or expense when recording the refund.
4. Fill out the other fields as you see fit.
5. Under the Outstanding Transaction section, select the checkbox for the Expense or Cheque you created when recording the refund.
6. Make sure the payment is equal to the open balance, then select Save and close.

You can also check out this article with more refund methods: Record a customer refund in QuickBooks Online.

Let me know if you have any other questions in mind. Take care and happy weekend!